Financial Marketers, Millennials And The Opportunities Therein
August 20, 2015 by Steve Olenski
Everybody should have health insurance. Life insurance. Auto insurance. Homeowner’s insurance or rental insurance. Bad hair day insurance. A pension plan. Savings bonds. Gold buried in the backyard. Yada, yada and yada.
There’s just too many financial products to buy, so why bother with any of them? Eat, drink, and be merry — for tomorrow we move back in with our parents.
Millennials to a greater or lesser extent partake of that mindset. So how will you effectively market financial options to them? Not by using Nickel Saver classified ads.
This year Millennials in the U.S. will number around $73 million. Here’s what you as a marketer need to be telling them to get them focused on your particular financial product:
Social Security Is Going Broke
Fox Business says so, giving the exact date as 2034. The Washington Examiner claims Social Security disability programs will run out of money next year, in 2016. The Los Angeles Times also gives 2034 as the date Social Security will run dry, but that’s only if Congress acts now to shore it up. The old advertising adage is to never market a negative, but in this case your financial sales campaign needs to remind Millennials that Uncle Sam may not be there when they’re ready to retire.
On The Other Hand
A new study by the Indexed Annuity Leadership Council (IALC) shows that 37% of millennials say they have no money for retirement, 24% say they owe more than they’ve saved and 18% say they have less than $5,000 saved.
So, what are millennials counting on when it comes to retirement? The majority of millennials, more than any other age group surveyed, has more interest in fixed indexed annuities, a savings vehicle that increases based on the market, but doesn’t lose the principal even when the market goes down.
Source: Flickr.com
Jim Poolman, Executive Director of the IALC says, “Millennials are just beginning to save for retirement and understand they need a more balanced portfolio given doubts about social security and pensions.” This creates a golden opportunity for portfolio managers to market indexed annuities and other alternative retirement savings vehicles to millennials.
Be It Ever So Humble
The New York Times reports that Millennials are staying at home with their parents in growing numbers. But what they don’t report on is what’s going to happen to the Millennials when the parents shuffle off this mortal coil. They may inherit the house, but chances are they’ll have to share it with siblings or lose it to a reverse mortgage. Playing the homeless card is not the ideal marketing strategy, but your financial package is going to look very appealing to someone who realizes they may lose their comfortable berth at any time.
Finally, Remind Them How Financially Responsible They Really Are
Effective marketing is all about flattery. Tell the consumer they deserve your product because of their hard work, and couch potatoes everywhere will want one. With Millennials you can actually back up the claim that they are more financially responsible than their parents with solid research. So tell them straight out, “Hey, we know you are financially savvy — that’s why you are going to want our financial service.” Start your sales pitch with a compliment, and half the battle is won.
As Mark Twain jocularly put it, “The lack of money is the root of all evil.” Nobody plans to be poor, but a smart marketer is still going to insure the success of his or her marketing campaign to millennials by using the highest-power psychological ammo possible.
